tv Your Business MSNBC December 29, 2013 4:30am-5:01am PST
. they are called preppers. people who are ready for any kind of disaster, natural or manmade. how entrepreneurs are marketing to them. and she had a great business plan for a new shoe company, until someone ripped off the idea. protecting yourself. coming up next on "your business." small businesses are revitalizing the economy and american express open is here to
help. that's why we're proud to present "your business" on msnbc. hi, there, everyone, i'm jj ramberg and welcome to "your business," the show dedicated to giving you tips and advice to help your small business grow. business psychologists will tell you that consumer purchases are generally based not on pragmati pragmatism, but on emotion, and that's why a growing number of entrepreneurs are marketing to those who fear the unknown and want to be prepared in the event of a disaster or domestic terrorism. we found one small business that serves the so-called prepper movement and practices what they preach.
>> it's so important for people to prepare and to protect their family from what's coming. and for me, it's not if, it's when. >> i'm proud to be a prepper. i think most people are preppers. >> while they proudly call themselves survivalists or preppers, deron damey and dave stewart, owner and manager of california-based off the grid survival supply store also call themselves entrepreneurs. >> we carry the products that you may need in an emergency to take care of your family. >> that's 1 million volts, okay? now, volts won't kill you, all right, but what's going to happen is, every muscle in your body when you get hit by this, is going to and then you will go over. if you have to start with empty plastic bottles, get the ball rolling. know that you have a supply of water that you can go to, because again, three days without water and you are dead. here's the question, how much
water do you have saved up? you think you're good. >> we usually keep, like, three cases. three cases of gallon waters. which is probably 12 gallons at the most. >> that's terrible, guys, that's terrible. >> fear is a motivator and it's a powerful tool in marketing for good and bad. >> adam is a professor of marketing at the nyu stern school of business. he says entrepreneurs like deron and dave use fear in a very direct way to market their products. >> what i would like you to do is make a plan and work your plan. >> one of the keys is if people are feeling fearful, you give them tools and a sense of control. >> our demographic is people who want to be able to be comfortable and survive if there's an emergency. >> so they actually manage their fear, overcome it. even though the chance of something bad happening is small, we want to know it's something we don't have to worry
about. >> fear is a very strange emotion, because it's very beneficial, but also very destructive at the same time. >> like many preppers, dave, the store manager, lives on a compound at this remote location. he keeps his family and emergency supplies secured blind this steel fence. >> let's say it's a terrorist attack or major earthquake or crash of the dollar. when that takes place, i highly suggest somebody has, you know, weapons to protect you and your family, because those people who come to take, they are not going to be asking nicely. >> when that moment of crisis arrives, dave feels he's going to be well prepared. he's got a solar heated stove, water supplies, independent energy sources, defensive lookout tower, and a pantry stocked to the ceiling with food, medicine, and weapons. deron told us one of his most important marketing lessons came from listening to one of his customers, a prepper who came in right after the store opened.
he was stationed at a nearby military base and his small comment made a big impression on deron. >> he goes, cool store, i wouldn't buy anything here. he goes, why is that? he says, this is all survival kits. where's the mini survival wallet with the file if i need to file to get out of a, you know, a tie handcuffed if i'm being kidnapped or where is the mres, where's the knives? >> right away, deron expanded his selection and sales took off. his customers didn't need to be lured into the store. when they arrived, many walked right past the front counter to get advice from other customers in the back. one was a dedicated prepper who knew a lot about the gear and the politics. that was dave. >> what i would say to them is, you know what, please get your head out of the ground, open your eyes, look at what's going on around you. >> dave actually came to me and said, hey, i just want to hang out in your store.
i want to talk to other people, and i want to share ideas and learn what they are doing. >> that's when deron decided to hire dave to man the front counter. >> my only complaint with dave is, he's so good at talking, sometimes he's not selling. but the great thing is, most people don't make their major purchase on their first visit, you know, they really want to go home and study it and make sure they are getting the right things. >> you want to look for the fit between the sales person and what they are selling. if you're a prepper or surviv survivalist and interested to selling others, at that point they are concerned about the situation at hand and already enga engaged. >> whether it's health fitness insurance or something else, all walk a very fine line. >> overload people and overwhelm them with fear. not enough fear doesn't motivate them. you have to find that sweet spot, and give them a sense of
control so they can at least mitigate the fear. >> if something happens, god forbid, i would want to be prepared for that. this company is clearly tapping into people's emotions, so what can we learn from what they did that can be helpful to your company? two great guests, marketing expert and change agent jeffrey hazlitt and business expert larry winget, calls himself the pit bull of personal development. he's also a best selling author and his latest book is called "grow a pair." larry, nice name. >> thanks. >> that is a memorable name for a marketer. all right. great to see both of you guys. >> it's always great to be here. >> yeah. >> what i was thinking as i was watching this, a bunch of things about why they are successful, but one of them was something someone told me this weekend, which was tell, don't sell.
these people clearly walk the walk. they are experts. they got the expert to talk to the customers, the customer who was the expert and that is the best marketing, right, jeffrey? >> always about being the brand you are, the promise you want to deliver. that's what brand is about, that and something you put on a cow or horse. does fear work? absolutely, but every emotion works. do you want your brand associated with that. certainly, there are companies. remember the y-2k scare and nothing happened, but the key thing for you, do you want fear associated with your brand, is it part of your message? does it relate back to what you do? listermint is a great example or listerine. they use fear, fear of cavities, all those things to be able to make sure you have good breath. there's lots of ways to be able to use fear. >> that's interesting. i was about to say the same thing, fear is not necessarily fear of a terrible disaster, it could be fear of not dressing
correctly for work, so is fear a good way to look at this, what problem am i solving. >> you know, we need to understand what we heard growing up about love makes the world go round is an outright lie. fear makes the world go around. everything we do is because of fear. never kid yourself about that. it absolutely works. turn over to the religious channels, we're not selling heaven, we're selling fear of hell, and we don't sell watches so you can be on time, we sell watches so you won't be late. we buy deodorant because we're afraid of smelling bad and people won't like us. everything we do is based on fear, and people buy from me, not because they are hopeful to find out how to be successful, because they are afraid to be a failure. you have to learn how to use fear correctly and not just scare them so much they won't buy, but use it to sell. >> so should we all be taking a
look at our companies, no matter what we sell, and say how can we -- what fear are we answering, sort of turn it around? >> it gets to the message directly and that's the key question you want. that's what we're always selling in some way. we might be delivering the message different. you can even sell fear with humor. there's lots of different ways you can do that, whether it's about bad breath, car safety, it's about everything, but in the essence what we're trying to do is get back to fundamental things we learn back in psychology class. everybody does, every politician practices every single day. what they do is try to get you off the fence. they say something positively or negative toy getting you off that fence. that's what advertising and selling is doing. fear is a great motivator and always has been. again, but do you want to be associated with the ultimate fear, and that's really, i think, you want to be able to have a good understanding of what your brand is.
look at larry winget, you know where he stands when he has a book "grow a pair," you know it's going to be direct and that message is going to be very, very clear. >> you don't know larry very well, larry isn't direct at all, he's a shrinking flower over there in the corner. one other thing i took from this, he listened to his customer. customer said this isn't the product i want, i want something else, and immediately he changed it. >> there are a lot of great business lessons. he does listen to his customers and his customers determine what he was eventually going to sell and that's the stuff selling best. we should all listen to our customers, and he hired a customer to run the front desk because the front desk needed that kind of expertise. i think there's a lot to learn from that. >> all right, larry, jeffrey, thank you for this advice and discussion on this piece. you guys stick around, because we've got more with you in a minute. imagine what it must be like to come up with a business concept, share it with other
people, only to discover someone else ripped off your idea and made a business out of it. it is like a dagger to your heart, right? well, one business owner says that is exactly what happened to her. kassie has a thriving washington, d.c. based shoe business, but this is not the company she thought she was going to start. that business was launched by someone else. >> they took the lease and almost took the same name. it was one of these things where, you know, is this reality, did i really just about open this store and have someone take this idea from me? >> it all started in 2003, when kassie quit her job as an accountant to follow her passion and open a specialized shoe store. >> what i was planning to do then was offer something that's unique and offer this edited collection, which a lot of people go to boutiques specifically for that.
>> even before the launch, kassie was sharing her idea with friends and family. >> i was very proud, very excited. >> at a wedding, kassie told some folks of her idea and those people shared the idea with others. soon after, her dream was a nightmare. she quickly realized her business idea may have been lifted. >> i went to meet with one of the designers and i had already previously met with her, and she said, i am so confused. somebody just came in, i thought they were with your company. they had a similar name. you know, obviously, they are buying my collection, so, you know, i thought it was you. i said, well, that is strange. do you happen to have their card? >> kassie called the phone number and got quite a surprise. as she recounts the conversation, it went something like this. >> i said, well, my name is kassie and, you know, you're not going to believe this, but i was about to open the same exact store in the same location, and really it almost had the same
name, too. they were like, well, you just must be shocked, but it's not a coincidence. we actually heard about what you were doing and we thought it was a great idea, so we decided to do it ourselves. and at that point i was speechless. >> it's hard to imagine that someone would actually casually admit to stealing her idea, but whether they did or they didn't, kassie says because it was still just an idea, her hands were tied. >> there was nothing i could do. there was nothing tangible that i could go back and act upon. and i'm not sure i would have anyhow. >> it took months for kassie to get over her disappointment, but she was determined to stick to selling shoes, and that's when devastation turned into inspiration. >> out of that really disparaging, heart wrenching experience, my business was born. >> kassie reached out to other professionals for a crash course in catalog sales. while some people doubted her,
she was determined to push ahead. >> at the time, people were thinking shoes in a catalog? that's never going to work. >> of course, that was then, and this is simply soles now. staying true to her original mission, kassie owns a company that sells designer names and she's even added designs of her own. >> my brand is lilly bee, and i started lilly bee in spring of 2008 and it's become our best selling collection. >> while kassie admits she's a bit tight lipped about her ideas. >> i'm a little bit, i would say, more cautious. i think that would be a wise suggestion. >> she's found peace with her past. >> i'm very grateful to be here, so i really strongly believe that good or bad, every experience helps mold you and shape you for what's to come. small businesses have a higher fraud rate than larger companies, so how secure is your
business? here now are five ways to protect yourself from some common forms of fraud and cyber crime, courtesy of the u.s. small business administration. >> one, separate your personal banking from your business accounts. that way fraudsters can't get their hands on all your money. reporting deductions on your tax returns will also be easier. two, use a dedicated computer for banking. make sure it's one that isn't used for any other online activity, like social media, web surfing, these machines can be susceptible for vulnerabilities. three, have a password policy. make sure you and your employees change them regularly. also, set rules that passwords use different ones for online and system accounts. four, do background checks on potential employees. the first step to prevent fraudulent employee behavior is to make the right hiring decisions.
five, secure your i.t. invest in a fire wall, as well as antivirus, malware detection. coming up, we answer your small business questions about how to expand both your staff and your marketing reach. and it's that time of year to go back to school, so i return once more to my alma mater to learn more about succeeding with a minimal viable product. there are cameras,, police, guards...ds us. but who looks after us online, where we spend more than 200 billion dollars a year. american express can help protect you. with intelligent security that learns your spending patterns, and can alert you instantly to an unusual charge. so you can be a member of a more secure world.
this is what membership is. this is what membership does. it's time now to answer some of your business questions. jeffrey and larry are back with us once again. the first one is about effective ways to grow your employee base. >> what advice do you have for young companies as they are looking to grow their teams? what best practices on hiring would you have? >> larry, i'm going to start with you on this one. what advice do you have for him? >> go slow. especially when you're new and you don't have a lot of extra money, the most expensive thing you're going to ever have is a line item in your budget will be people, so you make darn sure you really need to hire more people and that you can afford to hire more people. first thing i would do is ask more from the people who already work for you. as far as best hiring practices,
ask the tough questions. ask them what books they've been reading lately. ask them what they know about you and your company and their industry. if they say, listen, buddy, i'm just looking for a job, let them look somewhere else. >> there's the key, if they don't know about your company, not worth talking to them. >> ask friends. best people i've found is family and friends and the network from that group. i've always found the best people that way. the other thing, i'd ask them, why wouldn't i hire you? it's amazing how many people actually answer that question in an interview. when i talk to that potential hiree -- >> in a real way? >> something stupid like, well, i'm always late, or things like that. it's amazing how i can just check them off the list. i'm with larry. ask some really direct and hard questions. >> let's move on to the next one. here's a question about getting more exposure for you and your company. >> i would like to ask how the companies that you've been
involved with have successfully garnered media attention and utilized that to their best ability to either launch a product or bring their brand and image to a larger scale. >> this is your expertise, jeffrey. >> well, i love o.p.m., other people's money. i'm going to get other people to talk about my product and the best way to do that is deliver the product and service beyond anything you've done before. if you can do that, people will go out of their way to recommend you and that is the best way. do a great job of what you're doing. >> is it just a matter of delivering something great or do you have to ask your customers, hey, write about us. >> there's nothing wrong with asking. my last book, never stop selling your company. i can't tell you the number of times, i didn't know you did that. i failed to do that and learned early on, sell, sell, sell. >> larry? >> well, jeffrey's exactly right.
the worst thing you can do is say look at me, look at me, look at me. it's much better to say look at him, look at him, look at him. the way you get people to say look at him, look at him is to be amazing at what you do. in today's times, you can't just be good. you have to be amazing. great products and amazing service and there's nothing wrong with asking people to talk about you. great experiences and doesn't occur necessarily to me to write it on facebook. if a company comes to me and asks me, i'll say, sure. >> other people's money, the best advertising you can get. >> we have been marketing to small groups of users, getting one on one feedback. when is the right time and what are the strategies for broadening the marketing to larger groups. we're talking a little bit about the same thing here, larry, right? if you market to small groups of people, you do a good jorks hb,
hopefully they'll get the word out for you. >> make sure you're able to handle the large gruboups. one of the worst things you can do is do a really good job and say, look, we're ready to expand and you go out and you actually -- it all works and you get people's attention and you're not capable of handling all that of extra business and you screw the whole thing up because everybody's level of service goes down. be real careful in expanding to make sure you have the resources to deliver the service. >> you know what is interesting about this question, he said, getting feedback from a small group of people. >> i don't understand the difference between feedback from smalls and large. i say -- when it comes to feedback, i'm with larry in terms of how you sell and the way you're able to serve those. when it comes to feedback, add a zero. nothing wrong with adding a zero and getting more feedback and find new ways to sell to different people you didn't know before. when we first get started, we start with a small group and they're usually a lot like us.
we want to expand beyond those that are a lot like us. this is a great example of social media. social media is a great way for you to be able to do this in easy i was and lots of survey tools out there that are free and some that you have to pay for. you should be adding more zeros here. >> also about getting feedback, i think, this gets to your point, larry, about being ready to handle. on feedback if you get feedback from people, you need to be prepared to be able to react to it, right? >> yes, especially negative feedback. for a guy who sells all the fear, i get a lot of negative feedback. you have to be able to handle criticism and learn from every critique you get. >> all right. larry and jeffrey, i loved talking to you guys. i hope you guys are back soon. if any of you out there have a question for our experts, all you have to do is go to our website. the address is openforum.com/yourbusiness. once you get there, hit the ask the show link to submit a question for our panel. that website is openforum.com/yourbusiness. or if you would rather, e-mail us your questions and comment
too. that address is email@example.com. are you constantly forgetting all the passwords for different websites? check out our app of the week. robo form is a free password manager and form filler that allows one click logons in a safe and easy way. sync the app with your desktop account so you can update new logons from mobile or desktop. information is protected by an extra security pin so if your phone falls into the wrong hands, your information is still safe. i think one of the most interesting concepts in business today is the idea of a minimum viable product. a few months ago i went to my business school reunion at stanford and got to sit down with a handful of professors to talk to them about what they see as key factors to business success today. well, we have the last piece in this series for you. i chatted with russell siegelman, a lecturer in management who spent seven years
with microsoft. and i started by asking him to define mvp as it relates to companies. >> a minimal viable product is the idea you create a very simple product, a low resolution prototype, very simple, that allows you to put the product in front of your early adopter customers and see if they respond to a few pieces of function, a few use cases you want them to respond to. so in other words just try to address the core of the problem and don't build lots of bells and whistles fwha s because tha be a lot of waste. >> this isn't just about starting up. this is about launching a new product as an existing company or service. >> some big companies, one company here, intuit, big multibillion company, this is how they launch new products. >> you strip a product or service of its bells and whistles and get it out there to a few customers and see what they think? >> yeah, it is all about experimentation. see if customers have some interest in doing what you're
doing, even at a very early stage, the sooner, the earlier, the earlier the better. what you want to find out is whether you're solving the problem before you invest a lot of time and energy. >> it is hard, though, when you have an idea for a product or a service and you can see the big picture, the perfect picture, how do you strip it down and still test it, still get them something that is viable, as a consumer, to experience? >> yeah, it is a trick. and i'll be honest with you, a lot of entrepreneurs have a struggle with this. because they see this grand vision. they see this wonderful product. why would i show a very limited function, not sort of have the final fit and finish that i expect, put it in front of a customer, of course they're not going to like it. the truth is, there is some truth to that, the truth is, if you find early adopters who care about the need, they should respond to that. if you don't get that spark, you probably are headed off in the wrong direction. we do advise, really, start really low resolution prototype, simple things and see if you can
get customers to respond to that. >> do you ask them questions, give them surveys, how do you know what to do? >> that's the sort of the trick of the mvp. customers stated intentions and what to do are often quite different. yeah, you can do market research, can ask them for surveys, can ask them what they think. at the end of the day, it is better to see than do something. that's the whole thing behind mvp. i might tell you i want something, might tell you i'll use your product. force me to try to use it and see if i actually do. >> you launch your minimum viable product, how do you get enough feedback so you know how to move from there? >> there is nothing special about that. you need to enlist early adopters. those are the people really motivated to use your product, use it, give it to them, start using it, follow up with them. hey, how often do you use it. one thing about internet kind of products, you can instrument the products, can watch how often they use it. that's a good sign. >> the key to all of this then is having an open mind because
you have, again, this idea of a product, and once you get feedback, the end result that you should be getting may be entirely different. >> that's so true. we tell entrepreneurs, get locked in on the product, not the solution. because the solution should come from the customer. you have to have the vision, you want to direct the vision, you know, in a general direction, but you don't want to get too focused at the beginning on the solution because you don't really know what is going to solve the customer's problem. >> i think it is fascinating. we talk about listening to the customer and this is the way to act on it too. thanks so much, russ. >> my pleasure. thanks for joining us today. to learn more about today's show, all you have to do is click on our website. it is openforum.com/yourbusiness. once you get there, you'll find all of today's segments, plus some web exclusive content with more information to help your business grow. and you can follow us on twitter as well, @msnbcyourbiz. don't forget to become a fan of the show on facebook.
next week, when you first start your business, every cent counts. so quite often the cheapest place to take up headquarters is right at home. >> was really just a function of necessity. we needed a place to work, and the home was the best option for that. >> see how these two entrepreneurs are getting clients to see their startup as reputable, despite the fact their kitchen doubles up as their conference room. until then, i'm j.j. ramberg and, remember, we make your business our business. you're comfortable here. it's where you email, shop, even bank. but are you too comfortable? these days crime can happen in a few keystrokes. american express can help protect you. with intelligent security that learns your spending patterns,
and can alert you to an unusual charge instantly. so you can be a member of a more secure world. this is what membership is. this is what membership does. marriage equality comes to red state america. it is the last sunday of 2013, which means we're taking stock this morning of everything that has been accomplished this year. it has been a remarkable year for gay rights in the united states. doma was overturned and state after state joined the movement for marriage equality. that movement isn't over yet. it is now moving on to the red states of utah and indiana. where will it be heading next? also, do you like to drink soda or maybe they call it pop where you're from. expert